Autonomous Trucking Company Embark Gives In To Industry Challenges; Cuts Jobs; Weighs Liquidation

Author: Anusuya Lahiri | March 06, 2023 06:51am

• On March 1, 2023, Embark Technology, Inc (NASDAQ:EMBK) board approved a reduction in its current workforce by approximately 230 employees. 
• The decision reflected cost-reduction initiatives intended to reduce operating expenses.
• The autonomous trucking company reportedly looked to downsize 70% of its workforce and shut down two offices. CEO Alex Rodrigues noted in an internal email that the remaining 30% of workers would focus on winding down operations, TechCrunch reports.
• Rodrigues added, "Today, having exhausted all alternatives, we are taking the incredibly difficult step of laying off ~70% of the company and shutting down our SoCal and Houston offices."
• The layoffs come more than a month after banking advisory firm Evercore met with various AV companies to explore selling Embark's assets.
• Embark looks to book charges of approximately $7 million - $11 million in connection with the reduction in force, primarily consisting of the notice period and severance payments, employee benefits, equipment costs and related costs, and noncash expenses associated with the vesting of share-based awards. 
• Additionally, Embark expects to realize noncash expenses concerning specific other share-based awards. 
• Embark looks to book most of these charges in the first and second quarters of 2023 and complete the workforce reduction by the end of the second quarter of 2023.
• The board also approved a process to explore, review and evaluate a range of potential strategic alternatives, including exploring alternative uses of the Company's assets to commercialize its technology, additional sources of financing, and possible dissolution or winding up of the company and liquidation of its assets.
• CEO Alex Rodrigues and CTO Brandon Moak founded Embark in 2016. In 2021, Embark agreed to merge with special purpose acquisition company Northern Genesis Acquisition Corp II in a deal worth $5.2 billion.
• Price Action: EMBK shares closed lower by 4.51% at $3.81 on Friday.

Posted In: EMBK